Wednesday, July 25, 2007 Only about P13M of P80M worth of supplies passed required process in 2006 By Karlon N. Rama Sun.Star Staff Reporter
THE Vicente Sotto Memorial Medical Center (VSMMC) spent almost P80 million in public funds for various procurements in 2006.
But according to a Commission on Audit (COA) report submitted to the Office of the Health Secretary, only transactions worth over P13 million underwent public bidding.
Most of the procurements—P38,341,815.26—were made through canvass.
The rest (P27,954,256.31) were direct purchases from “exclusive distributors.”
“This is a gross deviation from the provisions of the law, which aims to obtain prices of goods at the lowest cost to the government,” the COA’s audit findings on the hospital stated.
The amounts are part of the estimated P100 million that the hospital lost allegedly through various graft and corrupt practices last year. (See related story)
The loss could have been more had it not been for initiatives introduced by the incumbent medical director, Dr. Gerardo Aquino Jr.
Based on the COA report, Aquino saved the hospital at least P2 million in the few months of his tenure. Primarily, the savings came after he ordered the repair and repainting of at least 30 hospital beds, which the previous administration had junked.
Sources say Aquino, who took over the post last December and who reportedly commissioned the audit because he couldn’t make heads or tails of how the hospital was being run before he came, is also reining in purchases and reviewing purchase orders thoroughly to prevent further questionable procurements.
The questionable acts aren’t limited to the failure of hospital management to hold public biddings for its purchases.
These include transacting business with suppliers who don’t have walk-in shops and suppliers with “doubtful financial capability,” and transactions with suppliers for services that the hospital can do for itself.
“We recommend that a thorough inquiry be made to determine the different liabilities of the persons/signatories involved as a result of these transactions and that those found responsible be made to answer for their acts,” he said.
COA and procurement rules allow purchases through canvassing instead of the mandatory public bidding, but only when it is as a contingency measure, provided that the amount doesn’t go beyond P50,000.
Procurement of ordinary or office supplies and equipment, or those that are not available in the procurement service, can also be done through canvassing instead of bidding so long as the amount involved does not go beyond P250,000.
According to COA, some of the VSMMC’s purchases do not go beyond the P250,000 ceiling.
But further evaluation showed that the figures were purposely adjusted to escape the P250,000-rule. This means contracts were split so each individual purchase didn’t reach the maximum limit.
Auditors poured over the hospital’s procurement records and identified a total of 107 companies supplying the hospital with different items. Twelve of them were not familiar to the auditors; three of them do not have business permits filed with the hospital.
But authority to operate notwithstanding, the three firms were each able to win contracts with VSMMC worth P767,454; P1,961,408 and P1,562,400 respectively.
“This is an indication that contracts were awarded to some favored suppliers, dispensing with documentary requirement,” the COA report read.
Based on the audit report, COA communicated with the company with the largest award and asked it to submit its business documents.
Further verification showed that the firm doesn’t have a retail store and that its given address is inside a private subdivision “with nary a sign that it is a commercial establishment.”
“It is hard to comprehend why of all the reputable establishments, procurement was made from this company,” the COA report pointed out.
Not all the procurements, though, were done with firms unfamiliar to auditors.
A lot of transactions involving medicines, for example, were done with one well-known firm amounting to P13,360,966.50.
“We recommend that management observe the pertinent provisions of Republic Act 9184 (the government procurement act) that the general rule in procurement is competitive bidding,” the report said.
What triggered COA’s scrutiny of the procurement anomalies were the hospital’s white bed sheets.
Auditors were able to get hold of information that the hospital spent P708,750 on 1,050 pieces of bed sheets for 2006 “without solid proof that the items procured were of better quality than what the hospital seamstress could have made for P450,000 less.”
The hospital’s Internal Control Unit department head had pointed out that the hospital could save some money if it bought linen for seamstresses to work on instead of buying ready-made bed sheets.
But the previous medical chief ignored the official’s advice in favor of the justification of a laundry worker who claimed that the ready-made ones are better. (KNR)
